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Research

Research

Forced arbitration is a rigged system designed by corporations in which injured workers and consumers have no meaningful chance of finding justice. Forced arbitration requires Americans to “agree” to surrender fundamental constitutional rights – often without ever realizing they’ve done so. When corporations harm workers and consumers by cheating, stealing, or even breaking the law, cases that should be heard by a judge or jury are instead funneled into a secret system controlled by the wrongdoers in which there is no right to go to court, no right to a jury, no right to a written record, no right to discovery, no transparency, no legal precedents to follow, no opportunity for group actions when it would be too difficult or costly to file a claim alone, no guarantee of an adjudicator with legal expertise, and no meaningful judicial review. Without such checks and balances, the deck is stacked heavily against workers, patients, and consumers, and systemic misconduct is allowed to continue in secret.

Corporations were contrite in 2018. Many spent millions of dollars studying how to apologize and running advertising campaigns to say sorry to Americans for defrauding customers and investors, failing to protect sensitive personal information, and failing to create workplaces where sexual harassment is not tolerated. But do these apologies lead to meaningful changes to improve the quality and safety of the products and services provided?

AAJ’s new report, Worst Corporate Conduct of 2018, examines how civil justice is the most powerful tool to hold corporations and institutions accountable when they cause harm. From the energy companies who spent decades denying their role in climate change, to a university and sports program that for years protected a pedophile instead of students and athletes, institutions have shown time and again they will not act in the public’s best interest unless something forces them to. In these cases, and others involving unscrupulous student lenders, defective airbags, child slave labor, and corporate attempts to rig justice, the civil justice system has allowed Americans to hold bad actors accountable and change the way they do business.

Servicemembers and veterans are often targeted by the unscrupulous and, despite their service to their country, are frequently denied the constitutional rights they fight to protect.

Though Congress has passed laws to protect the rights of servicemembers and veterans, legal maneuvers have left many unable to hold wrongdoers accountable when a bank forecloses upon a deployed soldier’s home, when an employer fires a reservist who’s called to active duty, when a commanding officer rapes a subordinate, or when exposure to a toxic substance on the job causes cancer.

When our institutions fail to protect the rights of men and women who make up America’s first line of defense, the civil justice system has proven to be the last line of defense..

In 2017, the #MeToo movement forced the country to confront an uncomfortable truth about how women are treated in the workplace. Women across the country began to speak out about being sexually harassed and assaulted at work. This epidemic has remained secret in large part because forced arbitration clauses hidden in the fine print of employment contracts prevent workers from holding their harassers and employers publicly accountable when they create a hostile work environment. Such forced arbitration clauses were brought into the spotlight when former Fox News host Gretchen Carlson bravely shared her story of sexual harassment. In sharing her story, Carlson prompted other women to come forward and share their experiences – uncovering a corporate culture rife with rampant sexual harassment.

The sexual harassment scandal at Fox News is just one example highlighted in AAJ’s most recent report, Worst Corporate Conduct of 2017. The report outlines multiple examples of corporations engaging in cover ups and frauds that affected millions of Americans in 2017: from Equifax profiting off its massive data breach, to Takata replacing its deadly airbags with more deadly airbags, to Wells Fargo’s seemingly never-ending series of schemes to rip off its customers.

When corporations put profits before safety and customer and employee welfare, and the regulatory system proves unable to force change, the civil justice system is the last line of defense to protect consumers. Lawsuits have proven to be the most effective, and sometimes the only, mechanism for deterring negligent behavior and rooting out corporate misconduct.

Throughout modern history, women have suffered more than men from the effects of dangerous and defective drugs and medical devices. In the late 1800s, women were frequently given morphine for hysteria and methamphetamines for depression. In the early 20th century, women were encouraged to use Lysol as a douche and unofficial contraceptive aid. In the 1950s and 1960s, women were the victims of some of the worst disasters of modern health care with the thalidomide and DES scandals.

Even after consumer advocacy efforts drove changes in regulation, women continued to suffer disproportionately. From snake oil “hormone treatments” to deadly contraceptive devices, the last 150 years have been littered with dangerous drugs and devices that disproportionately affect women.

Every year, more than 2 million people are injured and more than 30,000 killed in 6 million automobile crashes on U.S. roads. Widespread adoption of robot cars could have a revolutionary impact on these figures, potentially preventing 90 percent of crashes and saving thousands of lives every year. The impact of such a robotic revolution would go beyond transportation.

Robot cars may transform the automobile industry from one based on car ownership to one based on ride-share services. The auto insurance industry may wither, as the idea of personal car ownership slowly disappears. And without human drivers, or insurance policies to match, traditional approaches to liability when there are crashes may have to evolve.

Though few realize it, forced arbitration clauses are endemic in today’s marketplace — hidden in credit card agreements, bank accounts, corporate social media pages, even Starbucks gift cards. More than half a billion arbitration provisions infiltrate our everyday lives. Forced arbitration is Corporate America’s Trojan Horse — a campaign dreamed up by a Wall Street coalition of banks and credit card companies to eliminate accountability. Despite their prevalence, few consumers are aware of the forced arbitration clauses they are bound to, and fewer still realize they have been stripped of their constitutional rights.

The dangers of traumatic brain injuries in sports have long been known, but it is only recently that widespread change in attitude to such injuries has taken hold, as the civil justice system has begun to hold sports leagues and school districts accountable. Through a small number of lawsuits, the civil justice system has driven the most radical change in the health care approach to athletes in the history of sports.

Every year, 48 million people fall sick, 128,000 are hospitalized, and at least 3,000 die from foodborne illnesses, costing the nation approximately $77 billion. And this is only the tip of the iceberg, as for each reported case many more go unreported. Salmonella, for instance, sickens 1 million people, hospitalizes 19,000, and kills nearly 400 every year, yet for every diagnosed case 29 more go undiagnosed.

What makes an already imperfect situation intolerable are the frequent incidences of reckless negligence by food producers trying to cut corners. For example, the 2009 peanut scandal, in which executives allowed peanuts to be shipped with salmonella for three years, eventually killing at least nine people.

When food companies put profits before safety, and the regulatory system proves unable to force change, it has fallen to the civil justice system to protect consumers. Lawsuits have proven to be the most effective, and sometimes the only, mechanism for deterring negligent behavior. Research shows that litigation provides significant incentives toward food safety and deterrents against negligent conduct.

GM’s fatal ignition switch scandal has once again brought the issue of automobile safety to the forefront. Like so many previous cases, a lawsuit has uncovered what is an unfortunately recognizable pattern: an automobile manufacturer discovers a defective design, but refuses to fix it because it puts profits over people.

In the latest case, GM recalled more than 2.6 million cars because of ignition switches that had a defect that allowed them to slip from the “on” position to the “accessory” position, shutting off engines, power steering, and brakes, and disabling airbags. Incredibly, GM knew of the fatal ignition switch defect as far back as 2001, but decided not to fix it because it would have meant adding a 57 cent part to the cost of each car. The danger was finally exposed by a lawsuit brought by a driver’s family. At least 13 deaths have been linked to the defect, though consumer advocates believe that number may be higher.

Litigation will ultimately play a key role in identifying what went wrong in the most recent safety issue—the GM ignition switch debacle. These findings will aid regulators and legislators in protecting the American public in the future. By holding manufacturers accountable, the civil justice system will continue to protect Americans, while spurring generations of safety innovations, as it has done for more than half a century.